[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]






                                     

                         [H.A.S.C. No. 112-51]

 
                       HUMAN CAPITAL MANAGEMENT:
                        A HIGH-RISK AREA FOR THE
                         DEPARTMENT OF DEFENSE

                               __________

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD

                             JULY 14, 2011


                                     
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                   HOUSE COMMITTEE ON ARMED SERVICES
                      One Hundred Twelfth Congress

            HOWARD P. ``BUCK'' McKEON, California, Chairman
ROSCOE G. BARTLETT, Maryland         ADAM SMITH, Washington
MAC THORNBERRY, Texas                SILVESTRE REYES, Texas
WALTER B. JONES, North Carolina      LORETTA SANCHEZ, California
W. TODD AKIN, Missouri               MIKE McINTYRE, North Carolina
J. RANDY FORBES, Virginia            ROBERT A. BRADY, Pennsylvania
JEFF MILLER, Florida                 ROBERT ANDREWS, New Jersey
JOE WILSON, South Carolina           SUSAN A. DAVIS, California
FRANK A. LoBIONDO, New Jersey        JAMES R. LANGEVIN, Rhode Island
MICHAEL TURNER, Ohio                 RICK LARSEN, Washington
JOHN KLINE, Minnesota                JIM COOPER, Tennessee
MIKE ROGERS, Alabama                 MADELEINE Z. BORDALLO, Guam
TRENT FRANKS, Arizona                JOE COURTNEY, Connecticut
BILL SHUSTER, Pennsylvania           DAVE LOEBSACK, Iowa
K. MICHAEL CONAWAY, Texas            GABRIELLE GIFFORDS, Arizona
DOUG LAMBORN, Colorado               NIKI TSONGAS, Massachusetts
ROB WITTMAN, Virginia                CHELLIE PINGREE, Maine
DUNCAN HUNTER, California            LARRY KISSELL, North Carolina
JOHN C. FLEMING, M.D., Louisiana     MARTIN HEINRICH, New Mexico
MIKE COFFMAN, Colorado               BILL OWENS, New York
TOM ROONEY, Florida                  JOHN R. GARAMENDI, California
TODD RUSSELL PLATTS, Pennsylvania    MARK S. CRITZ, Pennsylvania
SCOTT RIGELL, Virginia               TIM RYAN, Ohio
CHRIS GIBSON, New York               C.A. DUTCH RUPPERSBERGER, Maryland
VICKY HARTZLER, Missouri             HANK JOHNSON, Georgia
JOE HECK, Nevada                     BETTY SUTTON, Ohio
BOBBY SCHILLING, Illinois            COLLEEN HANABUSA, Hawaii
JON RUNYAN, New Jersey
AUSTIN SCOTT, Georgia
TIM GRIFFIN, Arkansas
STEVEN PALAZZO, Mississippi
ALLEN B. WEST, Florida
MARTHA ROBY, Alabama
MO BROOKS, Alabama
TODD YOUNG, Indiana
                  Robert L. Simmons II, Staff Director
                Cathy Garman, Professional Staff Member
               Vickie Plunkett, Professional Staff Member
                    Lauren Hauhn, Research Assistant


                            C O N T E N T S

                              ----------                              

                     CHRONOLOGICAL LIST OF HEARINGS
                                  2011

                                                                   Page

Hearing:

Thursday, July 14, 2011, Human Capital Management: A High-Risk 
  Area for the Department of Defense.............................     1

Appendix:

Thursday, July 14, 2011..........................................    27
                              ----------                              

                        THURSDAY, JULY 14, 2011
   HUMAN CAPITAL MANAGEMENT: A HIGH-RISK AREA FOR THE DEPARTMENT OF 
                                DEFENSE
              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

McKeon, Hon. Howard P. ``Buck,'' a Representative from 
  California, Chairman, Committee on Armed Services..............     1
Smith, Hon. Adam, a Representative from Washington, Ranking 
  Member, Committee on Armed Services............................     2

                               WITNESSES

Charles, Keith, Director, Human Capital Initiatives 
  (Acquisitions, Technology and Logistics), U.S. Department of 
  Defense........................................................     6
Farrell, Brenda, Director, Defense Capabilities and Management, 
  U.S Government Accountability Office, and John Hutton, 
  Director, Acquisition and Sourcing Management Team, U.S. 
  Government Accountability Office...............................     3
Tamburrino, Pasquale (Pat), Jr., Deputy Assistant Secretary of 
  Defense (Civilian Personnel Policy)............................     5

                                APPENDIX

Prepared Statements:

    Charles, Keith...............................................    72
    Farrell, Brenda, joint with John Hutton......................    35
    McKeon, Hon. Howard P. ``Buck''..............................    31
    Smith, Hon. Adam.............................................    33
    Tamburrino, Pasquale (Pat), Jr...............................    56

Documents Submitted for the Record:

    [There were no Documents submitted.]

Witness Responses to Questions Asked During the Hearing:

    Mrs. Hartzler................................................    83

Questions Submitted by Members Post Hearing:

    Ms. Bordallo.................................................    88
    Mr. Forbes...................................................    89
    Mr. McKeon...................................................    87
    Mr. Palazzo..................................................    91
    Mr. Turner...................................................    90
   HUMAN CAPITAL MANAGEMENT: A HIGH-RISK AREA FOR THE DEPARTMENT OF 
                                DEFENSE

                              ----------                              

                          House of Representatives,
                               Committee on Armed Services,
                           Washington, DC, Thursday, July 14, 2011.
    The subcommittee met, pursuant to call, at 1:05 p.m. in 
room 2118, Rayburn House Office Building, Hon. Howard P. 
``Buck'' McKeon (chairman of the committee) presiding.

    OPENING STATEMENT OF HON. HOWARD P. ``BUCK'' MCKEON, A 
 REPRESENTATIVE FROM CALIFORNIA, CHAIRMAN, COMMITTEE ON ARMED 
                            SERVICES

    The Chairman. Good afternoon, ladies and gentlemen. Thank 
you for joining us today as we look at the Department of 
Defense's human capital planning efforts.
    Unfortunately, because most of the Federal Government, 
particularly the Department of Defense, has done such a woeful 
job in this area, it landed on the GAO's [Government 
Accountability Office's] high-risk list in 2001.
    After 10 years, it is still listed as high risk.
    Improvement in DOD's [the Department of Defense's] 
management of its strategic human capital resources is an 
absolute must. As the Defense Business Board pointed out, we 
have active duty military serving in positions that might 
otherwise be suitable for civilians.
    This could result in a serious misapplication of the 
special training and skills of our Armed Forces.
    In contrast, too often we have seen contractors serving in 
positions that should be staffed by civilians or military.
    The potential for waste and mismanagement is enormous when 
one considers the 718,000 DOD civilians and the several 
thousand of private sector contractors.
    Recognizing this, Congress mandated that DOD conduct a 
thorough analysis of its manpower requirements and develop a 
strategic plan of action for shaping its civilian workforce to 
address shortfalls in critical skills and competencies that 
affect performance of DOD's operations and the readiness of its 
forces.
    The analysis isn't about insourcing versus outsourcing. 
These are just planning tools, like military to civilian 
conversions, to ensure the appropriate element of the 
workforce, be it military, civilian or contractor, is being 
used and that adequate oversight is in place.
    I believe this is simple common sense, so I find it 
disheartening that Congress actually had to step in and require 
this analysis, because DOD paid little or no attention to 
something so logical and so critical as workforce management.
    This is particularly true in the area of acquisition 
management, where a continuing shortage of trained acquisition 
personnel impedes DOD's capacity and capability to oversee its 
increasingly complex contracts.
    As GAO noted in its 2011 high-risk report, I quote, ``The 
lack of well-defined requirements, the use of ill-suited 
business arrangements, and the lack of an adequate number of 
trained acquisition and contract oversight personnel 
contributes to unmet expectations and placed the Department at 
risk of potentially paying more than necessary.''
    Over the past several years Congress has provided the 
Department with various flexible authorities aimed at improving 
the Department's acquisition workforce.
    However, on a broader workforce level, we were informed 
last year that several significant manpower policies were on 
the verge of being signed out. But to date, we have seen 
nothing.
    Instead, arbitrary decisions are being made without 
sufficient analysis being conducted or guiding principles in 
place.
    As a result, the committee has included several provisions 
in this year's authorization bill to force a more effective 
human capital planning and total force management approach.
    An improved manpower requirements and termination process 
should ensure that DOD has the right people with the right 
skills doing the right jobs in the right places at the right 
time.
    Again, this is just simple common sense.
    And I look forward to our discussion here today.
    Ranking Member Smith.
    [The prepared statement of Mr. McKeon can be found in the 
Appendix on page 31.]

STATEMENT OF HON. ADAM SMITH, A REPRESENTATIVE FROM WASHINGTON, 
          RANKING MEMBER, COMMITTEE ON ARMED SERVICES

    Mr. Smith. Thank you, Mr. Chairman.
    And thank you for the witnesses for being here today and 
for their work. This is obviously a critical piece of the 
Department of Defense.
    Human capital is the most important thing in whether or not 
our military functions well. That is true for both civilian and 
active duty. Here today we are going to talk mostly about the 
civilian side of it, but I think it is important whenever we 
think of human capital think of the total operation--everybody 
who is working--bless you--for the DOD should be part of our 
calculation.
    How do we get the most out of people that we hire? They are 
our most valuable asset. Add to that the fact that we are 
entering very, very difficult budget times and comparatively 
over the course of the last decade we have had a fair amount of 
money. We have seen the defense budget grow.
    And there are challenges there as well. As it grows that 
fast, sometimes you are not as careful as you should be with 
how you spend the money. And I think we have witnessed that.
    Now, we are going to enter into a phase where we have the 
opposite problem--tighter resources, tougher choices to be 
made. And I think what this committee wants, while we 
understand that you have to make those budget choices.
    And I always, you know, as someone who had to try to deal 
with the budgets here on the Federal level, always love it when 
people say, ``You know, this is just too important; cost 
shouldn't be an issue.''
    That is a noble sentiment. And I wish I lived in that 
world. But we don't. Cost will always be an issue.
    But when you are looking at cost, you also want to make 
sure that you don't just throw up your hands and arbitrarily 
go, ``Let us just cut it at this point and move on.''
    Try to be strategic in how we make those decisions, because 
a lot of times excessive cuts can wind up costing more money. I 
think that, you know, is arguably the case with what happened 
with our acquisition force, as the chairman mentioned.
    You know, we did a pretty substantial cut in our 
acquisition force over the course of about 10 years. And when 
you look at the last decade of acquisitions in the Department 
of Defense, you see a very spotty record, at best.
    Clearly, there was money that could have been saved.
    And recapitalizing that force, getting more trained 
acquisition people in the DOD is critically important.
    So we have to try and balance all of those things. I know 
you don't have an easy job in trying to do that. And I look 
forward to your testimony explaining to us how we are going to 
go about doing it. And we offer any support we can give from 
this committee.
    Thank you, Mr. Chairman. I yield back.
    [The prepared statement of Mr. Smith can be found in the 
Appendix on page 33.]
    The Chairman. Thank you.
    And thank you all for being here today. We are going to 
have a problem. At about 2 to 2:30 they are going to call for 
votes. And that is probably going to bring an end to our 
hearing. So if I could ask you to please make your statements 
as succinct as possible, to give as much time as we can for 
questions, I would appreciate that.
    Again, thank you for being here.
    We have with us today Ms. Brenda Farrell, the director of 
defense capabilities and management in the Government 
Accountability Office; Mr. John Hutton, director, Acquisition 
and Sourcing Management Team from the U.S. Government 
Accountability Office; Mr. Pat Tamburrino, Jr., Deputy 
Assistant Secretary of Defense for Civilian Personnel Policy, 
and Mr. Keith Charles, Director of Human Capital Initiatives, 
Acquisitions, Technology, & Logistics.
    Let us start with Ms. Farrell.

STATEMENT OF BRENDA FARRELL, DIRECTOR, DEFENSE CAPABILITIES AND 
  MANAGEMENT, U.S GOVERNMENT ACCOUNTABILITY OFFICE, AND JOHN 
  HUTTON, DIRECTOR, ACQUISITION AND SOURCING MANAGEMENT TEAM, 
             U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Ms. Farrell. Thank you, Mr. Chairman.
    Mr. Chairman, Ranking Member Smith and members of the 
subcommittee, thank you for the opportunity for my colleague 
Mr. Hutton and myself to be here today to discuss our work on 
DOD's human capital management of its large, diverse civilian 
workforce.
    Strategic workforce planning, an integral part of human 
capital management, helps organizations to determine if they 
have staff with the necessary skills and competencies to 
accomplish their strategic goals.
    Since 2001, as you noted, Mr. Chair, we have listed human 
capital management for Federal civilians as a Government-wide 
high-risk area. Although some progress has been made, GAO 
reported last February the area remains on our high-risk list 
due to the need for agencies, including DOD, to address current 
and emerging skill gaps that are undermining their ability to 
fulfill their vital missions.
    Also, within DOD, the workforce-related issues have 
contributed to challenges in several of DOD's high-risk areas, 
including contract management.
    Over the years, Congress has required DOD to conduct human 
capital planning efforts for its overall civilian, senior 
leader, and acquisition workforces and provided various tools 
to help manage the Department's use of contractors, which 
augments DOD's total civilian workforce.
    While the specific requirements vary for each category, 
legislation required DOD to assist the skills, competencies and 
gaps, projected workforce trends and needed funding, among 
other things.
    The legislation also required us to assess DOD's plans. And 
we have responded to that legislation with three reports to 
date. Our workers found in general DOD's efforts to address 
legislative reporting requirements have produced mixed results.
    Today our written statement primarily summarizes the 
findings of our September 2010 report and is divided into three 
parts. The first addresses DOD's overall civilian workforce 
plan. We found that DOD assessed the critical skills of its 
existing workforce.
    The plan discusses 22 mission-critical occupations which, 
according to DOD, represents the results of the Department's 
assessment.
    However, DOD had not completed, one, an assessment of gaps 
in the existing or the projected workforce; two, identification 
of recruiting and retention goals and, importantly, funding; 
and, three, an assessment of its progress using results-
oriented performance measures.
    For example, DOD's plan shows that DOD had started 
competency gaps for only three of its 22 mission-critical 
occupations: language, logistics management and information 
technology.
    The plan does not discuss competency gaps for the other 19 
mission-critical occupations.
    The second part of our statement addresses the senior 
leader workforce plan. We found that the plan identified 
changes needed in the number of senior leaders authorized and, 
at the time of our review, stated that it expected executive 
requirements to increase by more than 400 by fiscal year 2015.
    However, in a separate review, we found that DOD did not 
document its analysis or summarize its results. Further, while 
DOD reported to Congress that this was a rigorous analysis, we 
found that some components' information was incomplete.
    Also, DOD's workforce plan did not assess the critical 
skills for its existing or its future senior leader workforce 
needs.
    Finally, the last part of our statement addresses DOD's 
acquisition workforce plan. We found that DOD identified the 
need to increase the size of this workforce, which consisted of 
about 118,000 civilians as of September 2009, by 20,000 
personnel by fiscal year 2015.
    In the plan, DOD outlines its strategies for growing this 
workforce. However, DOD had not completed: one, assessments of 
the skills and competencies of its acquisition workforce; two, 
identified what the appropriate mix of its total acquisition 
workforce needs should be; or, three, included information 
needed, such as funding.
    In summary, Mr. Chairman, while DOD has taken some positive 
steps, such as identifying mission-critical occupations and 
projecting workforce trends, DOD has made limited, progress, 
however, in identifying the skills and competency gaps that its 
workforce needs.
    Until DOD identifies the critical skills and competencies 
and the actual gaps and the root causes of those gaps, it will 
be difficult, for example, for the Department to develop 
effective recruitment, retention and investment strategies.
    Thank you, Mr. Chair. That completes our statement. We will 
be happy to take questions when you desire.
    [The joint prepared statement of Ms. Farrell and Mr. Hutton 
can be found in the Appendix on page 35.]
    The Chairman. Thank you very much. That takes both--okay.
    Mr. Tamburrino.

 STATEMENT OF PASQUALE (PAT) TAMBURRINO, JR., DEPUTY ASSISTANT 
        SECRETARY OF DEFENSE (CIVILIAN PERSONNEL POLICY)

    Mr. Tamburrino. Chairman McKeon, Ranking Member Smith and 
members of the committee, my name is Pat Tamburrino Jr. I am 
the Deputy Assistant Secretary of Defense for Civilian 
Personnel Policy reporting to the Under Secretary of Defense 
for Personnel and Readiness, Dr. Clifford Stanley.
    On behalf of the Secretary of Defense, Leon E. Panetta, and 
Dr. Stanley, I would like to thank you for inviting the 
Department of Defense to appear at this hearing today to 
discuss the Department's effort to enhance strategic human 
capital management in support of its critical missions.
    Allow me to offer that, while our efforts in the last 2 to 
3 years have resulted in steady improvement, such as in the 
management of our senior leaders, there is significant room for 
enhancement.
    I take seriously my responsibility of DOD leadership and 
the Congress to deliver cogent analysis and a rational plan to 
manage our workforce of greater than 780,000 employees.
    At the organizational level, leadership is relying on our 
strategic workforce plan to accurately map our current 
workforce skill set at all levels and to develop the tools and 
methodologies which will allow us to understand the demand 
signal for personnel resources, implement analytically-based 
methods which support long-term workforce planning, and 
identify the strengths and weaknesses in the skill portfolio, 
and develop targeted programs and strategies.
    At the individual level, employees are counting on DOD 
leadership to deliver career road maps which allow them to 
develop their functional and leadership skills in response to 
mission needs and implement corresponding individual 
development plans.
    To accomplish this, we need to leverage the successful 
workforce planning efforts made by the Department's acquisition 
community. We need to build upon the improvements we have made 
in managing the utilization of our senior leaders and we must 
develop a DOD-wide implementation plan for an integrated total 
force planning framework.
    Over the past several years, the Government Accountability 
Office has offered very constructive feedback of the 
Department's strategic workforce plan. I agree with the GAO's 
comments.
    To address GAO concerns, I am working a multidimensional 
strategy, including expanding coverage of the strategic 
workforce plan from 40 percent to 80 percent of the DOD 
civilian workforce; defining the market basket of functional 
competencies that employees in each career field should possess 
from entry through senior levels, based on current and emerging 
mission requirements; determining the proficiency levels each 
employee should have for their respective functional 
competency; developing career road maps that outline the 
training, education and job expectations across all of the 
occupational skill sets; implementing common planning and 
forecasting processes and tools that drive the consistent and 
efficient Department-wide plans; and, finally, tracking 
progress against the result-oriented performance measures which 
are identified in our fiscal year 2010 through 2018 strategic 
workforce plan.
    Fiscal 2012 will be a transitional year for DOD workforce 
planning as we implement this new strategy. In fiscal year 2013 
through 2015, I expect DOD's workforce planning capability 
effort to have matured to meet Congress's requirements.
    In conclusion, the Department acknowledges that our 
evolution is not yet complete, but we have a vision for how to 
meet the requirements directed by Congress. The Department is 
committed to enhancing strategic human capital management in 
support of its mission. It is a top DOD priority.
    Thank you again for your interest in this critical area and 
for the opportunity to speak with you today. I am pleased to 
take your questions.
    [The prepared statement of Mr. Tamburrino can be found in 
the Appendix on page 56.]
    The Chairman. Thank you very much.
    Mr. Charles.

STATEMENT OF KEITH CHARLES, DIRECTOR, HUMAN CAPITAL INITIATIVES 
 (ACQUISITIONS, TECHNOLOGY AND LOGISTICS), U.S. DEPARTMENT OF 
                            DEFENSE

    Mr. Charles. Chairman McKeon and Ranking Member Smith and 
members of the committee, my name is Keith Charles. I am the 
Director of Human Capital Initiatives, directly responsible to 
the Honorable Ashton B. Carter, Under Secretary of Defense for 
Acquisition, Technology and Logistics; and Mr. Frank Kendall, 
his Principal Deputy, for providing leadership and management 
to all Department-wide matters for defense and acquisition 
workforce.
    Thank you for the invitation to appear before you here 
today. I am pleased to be here with an important colleague in 
our workforce efforts, Mr. Pat Tamburrino, Deputy Assistant 
Secretary of Defense for Civilian Personnel Policy.
    I also look forward to working with the General Accounting 
Office as we continue to improve our efforts to strengthen the 
acquisition workforce and improve acquisition outcomes.
    I ask that you include my written statement in its 
entirety.
    The Chairman. All of your written statements will be 
included in the record. With no objection, so ordered.
    Mr. Charles. All right. Thank you.
    My prior work in DOD included establishing the first 
acquisition corps in the Department of Defense when I was with 
the Department of the Army.
    The predecessor to the program implemented by DAWIA, the 
Defense Acquisition Workforce Improvement Act.
    My return to the Department in March of 2011 is indeed an 
honor, and I look forward to serving the Nation by 
strengthening not only today's acquisition workforce, but 
strategically ensuring the readiness of the future acquisition 
workforce.
    We must not only address the immediate challenges and 
risks; we must also ensure readiness of the mid-career 
acquisition workforce in the 5- to 10-year horizon.
    If there is one take away today, it is this. The shortage 
we have is in the 5- to 10-year horizon. We need to focus--
focus on that and fix that before it becomes a disaster.
    While action has been taken to rebuild and improve the 
acquisition workforce, significant efforts remain. Secretary 
Panetta and Under Secretary Carter are leading efforts to 
maintain a strong national defense while improving our 
discipline and managing taxpayer resources.
    The Department must increase its buying power and deliver 
on efficiencies and affordability imperatives while modernizing 
and resetting our military force.
    We must maintain a core acquisition capability and 
continuously improve the acquisition outcomes to ensure our 
warfighters always have the decisive edge.
    To achieve these imperatives, the Department must have 
high-quality military and civilian acquisition workforce and 
appropriately use talent of federally funded research and 
development centers, FFRDCs, and university-affiliated research 
centers, UARCs, and contracting support.
    Since 2009, DOD leadership reversed the decline in 
acquisition workforce by establishing and filling new capacity 
positions. The Department's initiative to grow the workforce is 
continuing. We have achieved 8,600 of the original 20,000 
target in new work force capacity.
    There are two parts to the growth initiative. Ten thousand 
of the workforce growth is supported by the Defense Acquisition 
Workforce Development Fund. We will finish this growth.
    Another 10,000 is part of the Department's insourcing 
initiative.
    We have completed 3,200 of this growth now; however, 
remaining insourcing will be on a case-by-case basis.
    Our growth to date is aligned with strategy. We have 
strengthened in-house systems engineering, tests, program 
management, contracting, cost estimating and contract pricing 
capacity.
    We have also increased the capacity of the Defense Contract 
Management Agency and the Defense Contract Audit Agency.
    As we complete efforts to restore size, we must place major 
emphasis on having a qualified and ready workforce. One of our 
greatest imperatives is to ensure the readiness of the smaller 
mid-career acquisition workforce to succeed the larger senior 
career workforce. Many in the senior career workforce are 
retirement age now or near retirement.
    The mid-career group needs the capacity, capability and 
experienced readiness to be acquisition leaders and take on 
major acquisition responsibilities. We must strengthen the mid-
career workforce through coaching, mentoring and mastering 
practitioners from the senior workforce.
    We must ensure not only continuous learning, but continuous 
career development. We must ensure mid-career development which 
builds on early career certification, creates the next 
generation of masters in our acquisition profession.
    The Department's collective efforts to strengthen the 
acquisition workforce represents a sound and effective approach 
to reducing risk. GAO found that DOD's April 2010 plan 
addressed five of the statutory report requirements, partially 
addressed another 10, and did not address one, which required 
input on statutory needs.
    Our next chapter of initiatives will strengthen our 
strategy, reduce risk, and continue progress to meet statutory 
requirements.
    We appreciate the support from this committee on the 
President's proposed fiscal year 2012 budget request to 
continue the acquisition workforce improvement program. We also 
appreciate this committee's support of the President's proposal 
to create a consistent 3-year availability of all credits to 
the Department of Defense workforce development fund.
    We are very concerned about the $200 million reduction to 
the DAWDF [Defense Acquisition Workforce Development Fund] in 
the House fiscal year 2012 defense appropriations bill. We need 
full restoration, or we will need to use the internal DOD 
collection process to obtain funds needed in order to fully 
accommodate the painful reductions of O&M [Operations and 
Maintenance] accounts across the components. You have my 
commitment to make sure that these funds are judiciously used 
to meet our highest priorities.
    In conclusion, I believe the Department has taken decisive 
actions to address human capital risks by rebuilding and 
strengthening the acquisition workforce. However, we must apply 
lessons from the past and follow through with strategies that 
continuously build a high-quality acquisition workforce.
    Acquisition is a core function of good government and of 
national security. We must increase our buying power and 
deliver on efficiency and affordability imperatives, while 
modernizing and resetting our military force. We must always 
ensure that our warfighters have the products and services they 
need to maintain this decisive edge.
    To achieve these imperatives, the Nation and the Department 
must have a consistently right-sized, high-quality acquisition 
workforce. We must act now to ensure readiness of the mid-
career acquisition workforce in the 5- to 10-year horizon.
    I thank you for this opportunity, and I welcome your 
questions.
    [The prepared statement of Mr. Charles can be found in the 
Appendix on page 72.]
    The Chairman. Thank you very much.
    We are concerned about some of those budget cuts, too. Some 
of the appropriators cut more deeply than we did. And there 
have been a lot of cuts in defense in the last year-and-a-half 
that we have a lot of concerns about.
    Mr. Tamburrino, what initiatives are being undertaken to 
ensure that the Department's workload and missions are 
prioritized, eliminated where feasible, or made more efficient 
to ensure that the Department aligns the right persons with the 
right skills at the right time and the right quantity to 
perform the right tasks?
    Mr. Tamburrino. Mr. Chairman, thank you for that question.
    In our total force management plan we are pursuing exactly 
that rubric. We are taking in the Department's missions, 
prioritizing them and trying to match them across three 
dimensions: warfighting platforms, supporting infrastructure, 
and people.
    For people we have three choices: civilian, military and 
contractors. Trying to always determine where is the best mix, 
where is the best talent set, and how do we effectively meet 
the mission--the Department's mission needs?
    And the efficiency efforts undertaken in the past year all 
drive towards prioritization of mission, identification of 
overhead administrative functions, and other low-value work 
that can be eliminated so we can apply the resources 
effectively to the workload in the priority that the Department 
determines meets the national needs.
    The Chairman. It is hard to do all of this. Like, for right 
now I would like to have the lawnmowers----
    [Laughter.]
    The Chairman. Cut someplace else at this--at this 
particular time. But that is kind of the way we are.
    Thank you.
    Ranking Member Smith.
    Mr. Smith. Thank you.
    Ask you about the contracting out issue and the A-76 
process and sort of what goes into that. That has sort of been 
a vexing issue for some time. It seems like a fairly simple 
concept. You know, you make an economic decision as any 
business would do. You know, what makes the most sense, what is 
the most cost effective to do, and how something makes the most 
sense to do contracting out?
    Unfortunately, there are all kinds of ideological and 
stakeholders involved. So it--the process becomes horribly 
messed up.
    Is there any hope that we just have a sensible approach 
when it comes to civilian employees and fairly accurately 
measure, ``Okay, this makes sense to contract out, this makes 
sense to keep in-house?'' Are we making any progress in being 
able to do that, understanding that a lot of what drives it, of 
course, is, you know, the civilian workforce wants everything 
in-house, you know, the business community wants everything 
contracted out to them.
    And they are unbelievably clever in generating their 
arguments as to why they are right, and I mean that quite 
sincerely. If you listen to either side you are absolutely 
convinced that they are correct.
    How are we doing in trying to strike a balance there? And 
if folks at GAO have anything to say about that, as well, I 
would be interested.
    Mr. Tamburrino, why don't you take the first crack there?
    Mr. Tamburrino. Mr. Congressman, thank you for that 
question.
    We recently submitted a report to Congress on A-76 studies 
supporting the lifting of the moratorium on those studies. We 
believe they are an effective tool for helping to manage our 
workload and balance that workload against our resources.
    That report has several ideas for improved processes on how 
to make that program more efficient, more effective, take less 
time and educate managers how to use it. We think it is an 
effective tool to help us manage the workload appropriately.
    So we look forward to having continued discussion with you 
on that report once you have a chance to review it.
    Mr. Smith. Okay.
    So you think an apples-to-apples comparison is possible, 
because that is always one of the difficulties there? Because, 
you know, I mean, contractors do things differently than, you 
know, civilian workforce.
    Mr. Tamburrino. Sir, I think the Department's efforts are 
to make sure that those efforts which are inherently 
governmental, closely inherently governmental, or efforts that 
are inappropriate to do in the private sector for other 
regulatory reasons are in fact presented as opportunities for 
insourcing.
    When that is not true, we look at where is the best place 
to get that work done at the most efficient cost. And when it 
is outsourced we apply the Federal acquisition regulations and 
related.
    I think our report offers some ideas on how we can do that 
more efficiently and effectively. It is a good tool for 
managers to use.
    Mr. Smith. Okay.
    Mr. Hutton, did you want to----
    Mr. Hutton. Yes, I would like to say that at first you want 
to know what your total force is. You want to know what the mix 
should be. But to do that you have to know what your current 
capacity is. What are people, whether it be civilian, military, 
what kind of things are they actually doing, what are their 
competencies?
    But just as importantly, to what extent are you relying on 
contractors for activities as well? And when you break it down 
to looking at what are the contractors doing, and in particular 
the total force workforce mix, that was one of the points we 
made in a report last September that just with respect to 
acquisition workforce, there was a focus on the civilian, but 
not the entire total force. And that would be something that we 
would hope to see as we move forward with their next plan and 
when we review that plan.
    But there are various tools the Government can use to get 
better insights on how they are using contractors. And Congress 
has been encouraging DOD for several years to come up with 
these inventories of their service contracts. And we have been 
reporting on that for the last couple years.
    We have identified issues of just the nature of collecting 
that kind of information so you know what they are doing and 
what you are actually paying for those activities. But there 
are also requirements for them to review those inventories and 
make these independent decisions as to what are the contractors 
doing.
    Are they doing activities that we are comfortable with? Are 
they doing things that we are concerned about because they are 
inherently governmental? Are they doing things that are closely 
supporting inherently governmental functions, because all those 
things present risks to the Government.
    Mr. Smith. Thank you.
    One final, hopefully, quick question. It is the instances 
where active duty in most cases or civilian personnel go from 
being, you know, either active duty or civilian personnel to 
contractor.
    And, you know, we have heard this complaint from our 
constituents. I don't know if it is an urban myth or not, but 
you know, you are not saving any money, you are a guy who is 
doing the job for a lower salary. Gets their 20 years, retires, 
starts getting paid that and then turns right around the next 
day and becomes a contractor at a higher level.
    And not necessarily the exact same job, but there is no 
question that there are a fair number of people, you know, on 
the active duty side, in particular, who have gone from being 
active duty to being contractors, obviously bringing similar 
skills to the table.
    And it just seems like you are paying more at that point. 
Is that a problem, or is that just something that, you know, 
shows up in an anecdote or two?
    Mr. Tamburrino, if you want----
    Mr. Tamburrino. Mr. Congressman, thank you for that 
question.
    In terms of--I cannot address that particular issue, but in 
terms of contracted services, our approach is we do not buy 
individual people or we do not buy employees specifically, we 
buy work. We evaluate the competitive nature of the effort 
based on the work that is going to be performed for us. And 
that is what guides our selection processes.
    As to your specific question, I couldn't answer that 
without additional research.
    Mr. Smith. Okay.
    Anybody got anything beyond that?
    If not, that is----
    Mr. Hutton. I think from the GAO perspective, one of the 
important things we would want--that if there was a decision 
that--to provide this service--is going to be provided by a 
contractor that the Government gets a good outcome. And that 
requires sufficient acquisition workforce staff to make sure 
that they do a sound business arrangement, that they have the 
sufficient oversight to make sure that the contractor performs 
as the contract would specify.
    What you point out are things that I have heard as well, 
but I don't have any empirical data or other further analysis.
    Mr. Smith. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Mr. Bartlett.
    Mr. Bartlett. Thank you, Mr. Chairman.
    Dr. Parkinson was a very keen observer of human behavior, 
particularly in the workforce. He observed, for instance, that 
work expands to fill the time available for its completion. I 
think you could have no better example of that than the U.S. 
Congress.
    He also noted that as an organization grew, more and more 
of its energies were consumed with internal communication. The 
larger the organization got, the more their energies were 
consumed with communicating with each other. And finally at 
some point, a different point depending on the kind of 
organization it was, essentially all of their energies were 
consumed with internal communication. They got little or 
nothing done.
    How far is DOD along this continuum? They are really big 
and really complex. Is it closer to 25 percent, 50 percent, 75 
percent? I would just like for you to go down the line and each 
of you tell me how far you think DOD is along this continuum.
    Ms. Farrell. I think from a GAO perspective, we would be 
looking at how much attention has top leadership paid to 
strategic human capital management? And although it is cited in 
the 2010 QDR [Quadrennial Defense Review] of DOD that strategic 
human capital management is of growing interest, and a 
recognition that civilians are part of the total force, we do 
not see much communication throughout DOD about that attention, 
of what is it?
    The plan is another example. DOD has been working on this 
plan for several years, but it is still not complete. I don't 
know if that is due to a lack of communication within, but as 
an outsider there doesn't seem to be the attention at the 
leadership level to drive forward with the efforts needed to 
finish this workforce plan.
    Mr. Hutton. Likewise, as a GAO auditor, I am driven by 
data. And when I tackle a problem, the first thing I want to 
know is: What is the condition? And that would entail: What are 
we doing? What types of activities are we doing? Who is doing 
it? Are we doing it well? What types of competencies and skills 
do we need? And carrying it forward.
    But until you have that foundation and baseline, it is hard 
to make some kind of comparison like that. So that would be my 
answer.
    Mr. Tamburrino. Mr. Congressman, I think it is a priority 
for DOD and it has the attention of senior leadership such as 
Dr. Stanley. We are creating a total force rubric to guide us 
in the next budget cycle. In our efficiency reviews over the 
past year, a lot of emphasis was placed on low-value-added 
activities, overhead and administrative burden, and calibrating 
our workforce accordingly.
    And we have reinvigorated the functional community 
management discipline inside of DOD, so I have a senior person 
at the executive level responsible for every major occupational 
series in DOD now. And I am working with them individually to 
build the plan for your community.
    Because I do agree with the GAO. This has taken us a long 
time, and we need to do much better, and we are committed to 
doing much better.
    Mr. Charles. Mr. Bartlett, I would suggest to you that I 
honestly believe in what I do and what my organization does, 
that it does not exceed more than 25 percent of non-productive 
spinning around in circles. I truly believe we do 75 percent of 
real work.
    Mr. Bartlett. Thank you.
    Thank you, Mr. Chairman. I yield back.
    The Chairman. Thank you.
    Mr. Kissell.
    Mr. Kissell. Thank you, Mr. Chairman.
    And thank you, guys, for being with us today.
    Ms. Farrell, you were talking about earlier on in high-risk 
job classifications that only 3 out of 22 categories--can you 
expand on that a little bit? What--define ``high-risk.'' The 3 
out of 22, what are the other 19? How have we gotten here, or 
not gotten here?
    Ms. Farrell. Okay, I believe there are a couple of 
questions in there. One, I want to make it clear that the high-
risk list that I referred to is GAO's high-risk list that we 
started in 1990, where we surveyed programs or agencies that 
were subject to fraud, waste and abuse. And then later on, we 
enhanced that criteria to include areas of concern that needed 
transformation in order to be more cost-effective or efficient.
    Mr. Kissell. So the reason that you got on this list to be 
in high-risk is because of great concern is as to how the job 
was being done?
    Ms. Farrell. The reason that strategic human capital 
management was put on the list originally was due to lack of 
leadership over strategic human capital planning. That we felt 
there was a lack of leadership in terms of looking toward the 
future of exactly what skills would be necessary.
    There were also issues regarding developing a results-
oriented culture; that you would have a line of sight of what 
the individual did was aligned with the organization's goals. 
In February of this past year, GAO shortened the reasons that 
strategic human capital management was on our high-risk list to 
acknowledging there have been significant improvements.
    Congress has passed legislation, for example, regarding 
telework. OPM [the Office of Personnel Management] has put out 
guidance regarding human capital flexibilities to help the 
agencies understand what tools were already at their disposal. 
But we still felt that there was a need for agencies, including 
DOD, and the acquisition workforce in particular was 
highlighted in our February report, that they needed to do a 
better job of gap analysis.
    In other words, determining what your needs are today, if 
there are any gaps in those needs today, what your needs are 
for the future and if there are any gaps. And by ``gaps,'' it 
is not just the numbers. The numbers obviously are important. 
It is important to project the trends and know what your 
retention and your attrition rates are. But it is also 
important to know that you have a workforce composed of the 
right skills that you need.
    There have been emerging needs that we have seen develop in 
the last decade. When you look at the medical, it is in the 
paper everyday about traumatic brain injury. And DOD obviously 
has a need for medical providers to take care and do research 
in that area. What we wish for DOD to do, as well as Congress, 
it is in line, the same criteria that we are looking at for 
workforce plans are actually outlined in the legislative 
requirements for DOD to do a better job of determining what 
their needs are today and associated gaps, as well as in the 
future.
    Mr. Kissell. And what was the 3 out of 22 number?
    Ms. Farrell. Yes, those are the 22 what DOD has termed 
``mission-critical occupations.'' They are very general 
categories that within them contain a range of specific 
occupations. One is financial management; another could be 
medical. One is, in addition to the 22 I mentioned, acquisition 
management has 2 functional areas itself. These are occupations 
that DOD feels that it needs to do its mission.
    And what we are saying is when we looked at their plan of 
last fall, and the next plan's coming, so we are hoping to see 
progress, there were only--they had identified 22 mission-
critical occupations. That is the start, what is your need, but 
of those 22, they had only done gap analysis, started those. At 
the time of our review, they were not completed for three.
    Mr. Kissell. Do you have concerns about, okay, we have 
identified 22 and we have got progress on 3. Do you think we 
have picked the right three? Or do you have concerns about how 
we go about picking this? Or is this the three, the path of 
least resistance and maybe there are two or three others that 
we should have done first and didn't do? Or how would you 
assess the 3 that were chosen, versus the process of the 19 
that haven't been done yet?
    Ms. Farrell. Well, we would say all 22. If they feel that 
22 mission-critical occupations currently exist with the skills 
and competencies that their workforce needs, we would want to 
see all 22 completed.
    Now, they can prioritize that and have a plan, and I 
believe they do have a plan. It is just that it is going to 
take years. Whereas, we would like to see more of a how can you 
go ahead and complete this earlier.
    Mr. Kissell. Okay, thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Mr. Miller.
    Mr. Miller. Thank you, Mr. Chairman.
    Mr. Charles, if I could direct a number of questions to 
you. I will just make a statement and then the questions, and 
let you respond.
    In April, I guess, of 2010, the workforce strategy 
indicated that DOD intended to grow its workforce by some 
20,000 individuals through 2015, through a combination of half 
new hires, half insourcing functions that were currently being 
performed by contractor personnel.
    Since the report was issued, though, the Secretary has 
announced a limit to DOD's budget growth and announced that 
insourcing decisions are now going to be made on a case-by-case 
basis.
    Number one, is DOD's intention to still grow its 
acquisition force by 20,000? If not, what growth do you 
anticipate?
    Number two, are there enough funds budgeted to sustain the 
growth? And what is the current status of DOD's insourcing 
initiative? I know some of my colleagues have already addressed 
it, but I would be interested in knowing what factors led to 
the Secretary's decision to limit insourcing efforts.
    Mr. Charles. Well, let me start from the beginning. With 
regard to the civilian workforce, we have 152,000 people in our 
workforce now. That is 134,000 civilians and 18,000 military. 
That number is what we wanted to have at this stage of where we 
are.
    It varies a lot. It varies a lot in military and civilian, 
especially since we are in more than one armed conflict and we 
are doing rotations with military a lot. And therefore, that 
puts more pressure on the civilians and more pressure on the 
uniformed as well.
    So we don't have a magic solution and we don't spin a 
bottle and say, ``This is the direction we are going to go at 
this time.'' We have plans. If we can execute them, we do. If 
we don't have the assets to execute, then we can't.
    It is a difficult--it is a difficult process.
    Mr. Miller. So do you or don't you anticipate continuing 
growth through 2015?
    Mr. Charles. We are going to continue growth, but it is not 
going to be at the rate that we have done so far.
    Mr. Miller. And is that for budgetary reasons or----
    Mr. Charles. It is for budgetary reasons. It is for 
consumption of people reasons, both military and civilian.
    Mr. Miller. And could you just touch on what factors led to 
the Secretary's decision to limit insourcing efforts?
    Mr. Charles. Well, I can't really speak for the Secretary, 
but I believe that part of the reason for that is financial.
    Mr. Miller. That is all.
    The Chairman. Mr. Andrews.
    Mr. Andrews. Thank you, Mr. Chairman.
    The work that Congressman Conaway and I and our colleagues 
did on the defense acquisition reform panel made me want to 
come here today, because the work that you ladies and gentlemen 
are doing is so important.
    To put this in some perspective, the United States 
Department of Defense acquisition workforce will buy more goods 
and services this year than most of our State governments 
combined. Most of our State governments combined.
    To put it in further perspective, if they could improve 
their performance and we could improve our system to the point 
where we have a 5 percent savings in acquisition--you know, the 
person getting a Sam's Club membership, or a person being a 
little more careful by clipping coupons.
    If we could get a 5 percent improvement in acquisition, 
over 10 years that would amount to about 10 percent of the 
budget savings that the Congressional leadership and the 
President are looking for at the meetings at the White House 
this afternoon. This is a big deal.
    And one thing that Mr. Conaway and I found is that we could 
write all the good laws we wanted and design all the good 
systems we wanted and crack down on all the fraud we wanted, 
but we didn't have really talented, well-trained, well-
compensated, well-motivated people in the acquisition reform--
in the acquisition workforce--this all wouldn't work.
    So I am very interested, on page 12 of the GAO document for 
today. Ms. Farrell and Mr. Hutton reported that in September of 
this year they are going to give us another update on the 
issues of the critical skills and competencies of the civilian 
workforce and gaps in that workforce.
    Now, not to get ahead of our September review, but if you 
had to name, let us say, two critical areas of gaps in the 
acquisition workforce--in other words, we are missing people 
with skills A or B--what would those two most glaring areas be?
    Mr. Hutton. Thank you, Mr. Andrews. And I had the pleasure 
of testifying before your panel----
    Mr. Andrews. Did a very good job.
    Mr. Hutton. I would like to offer three.
    Mr. Andrews. That is even better.
    Mr. Hutton. One would be expertise in the area of pricing. 
I might look at the actual contracting function and the 
associated activities that go along with that. And the third--
gosh, I know I had three--oh, things like systems engineers and 
things like that are going to help with the acquisition.
    Mr. Andrews. Let us briefly walk through those three 
things. What do you mean when you say ``pricing''? Do you mean 
people with experience in a given marketplace who could tell a 
good deal from a bad one?
    Mr. Hutton. I would say that. Also, you have the auditors, 
like DCMA [Defense Contract Management Agency], DCAA [Defense 
Contract Audit Agency], that provide a function to support the 
acquisition community, whether it be in contract 
administration, or in supporting a contracting ops, or in 
things like looking at proposals and doing analyses of the 
contractors' proposals and things like that, that auditing 
function----
    Mr. Andrews. What about pricing information? One of the 
astonishing anecdotes which came out of our review was that the 
Navy had bought a refrigeration system for I want to say 
$14,000, and 18 months later bought precisely the same system 
for $37,000. And the main reason was that the acquisition 
official did not have a database in front of him or her that 
let them see what we had paid for it a year-and-a-half-ago.
    Have we made strides in improving transparency of that 
information for our buyers and decisionmakers?
    Mr. Hutton. I can't speak to that specific issue, but I do 
believe that if that was a recent example, and given the 
challenges the acquisition workforce has across the board, I 
would suspect that if there was any progress, it was 
incremental----
    Mr. Andrews. Now, when you say contracting functions, what 
does that mean? Does it mean access to lawyers who know how to 
draft good contracts? What does that mean?
    Mr. Hutton. I am thinking of things like the contracting 
officers, contract specialists, people that support the 
development of things like statement of work and, you know, 
some of the contract administration functions.
    Mr. Andrews. And finally, let me ask you, one of the things 
we wanted to do is create a career path for our uniformed 
personnel, where excellence in the acquisition field was 
rewarded with appropriate promotion and opportunity. Do you 
think we have made any progress in that area?
    Mr. Hutton. I am sorry, Mr. Andrews----
    Mr. Andrews. Our uniformed people. Very few of our 
uniformed people want to go into acquisition as a career----
    Mr. Hutton. Right.
    Mr. Andrews [continuing]. Because the rewards are not so 
great.
    Mr. Hutton. Right.
    Mr. Andrews. We want to fix that and make it a desirable 
area. Have we done any progress on that?
    Mr. Hutton. It is hard for me to say, because it is my 
understanding of the most recent acquisition workforce plan 
that came over here were focused largely on civilians and less 
so on the military and the contractors. But----
    Mr. Andrews. Thank you. Thank you.
    Mr. Chairman, if I may, that is one area I think we do want 
to focus on, is that this is a joint effort between our 
civilians and our uniformed personnel. We want to be--Mr. 
Conaway put it in that law, as we did--we want to be sure that 
a good career path for a uniformed person is this as well.
    Mr. Thornberry. [Presiding.] Yes.
    Mr. Andrews. Thank you.
    Mr. Thornberry. I think the gentleman makes a great point.
    Mrs. Hartzler.
    Mrs. Hartzler. Thank you. Thank you, Mr. Chairman.
    I wanted to follow up, Ms. Farrell, on your opening 
testimony, and also my colleague Mr. Kissell's question. I 
think it was the same area. You identified 3 areas out of 22, I 
believe, that you share are needs, language, logistics and 
information technology. Is that right?
    Ms. Farrell. Those were 3 areas that DOD had started their 
gap analysis on, of their 22 mission-critical occupations. The 
occupations that they had designated as mission-critical.
    Mrs. Hartzler. Okay. Very good.
    I wanted to ask Mr. Tamburrino, do you have problems 
filling open positions right now? And if so, what are those 
positions and why do you think, if you do have problems?
    Mr. Tamburrino. Madam Congressman, thank you for that 
question.
    We don't have problems filling our vacancies right now.
    There are many, many applicants for all of our jobs.
    That our challenge is to respond to the GAO is absolutely 
right. They have asked us to do critical skill gap analysis. 
That takes quite a while. And I am obligated to find a way to 
do that quicker.
    We want every person that comes to work for us to know from 
the day they start at the entry level until they go to the most 
senior level, this is the career path they can expect to 
follow, these are the functional skills we expect them to 
accrue, and these are the proficiency levels we expect them to 
have.
    That takes a lot of intense management. And we are making 
progress across more than three areas in that, but we agree we 
have to do a little bit more to show due diligence here.
    Mrs. Hartzler. How long do you think it would take for 
just, say, one of these jobs, say, let us take logistics, to 
rise in proficiencies and to the skill levels that you need?
    Mr. Tamburrino. It takes dedication of senior leadership 
and several subject matter experts. I think it takes on the 
order of--I would have to go back and check--but it is on the 
magnitude of months.
    But then there are surveys that we use with OPM to assess 
those, and we assess the entire workforce for what they 
actually do when they go to work in the morning, what skills, 
knowledges and abilities they use.
    Those are much more complicated and they take quite a 
while, and we are working with OPM on how to make that quicker, 
because those are complicated surveys at the detailed level of 
what a person does on a day-to-day basis.
    Mrs. Hartzler. Well, I am a small-business owner with my 
husband, and I have written job descriptions before, and I know 
this is beyond a job description. But it is hard for me to 
fathom and understand why it would take months to basically 
write a job description. It seems like the DOD needs more 
business-minded people and more business experience.
    Mr. Tamburrino. Yes, ma'am. Job descriptions are part of 
it. These are getting down to the skills they need, what 
training they need to accrue those skills, and what proficiency 
levels they must demonstrate.
    So we can write the job description pretty quickly, but 
getting to what does the person actually need to do when they 
sit at their desk, it almost varies by what service they are in 
and what occupation they are doing.
    So we have several communities that have done a really 
excellent job--financial management community is a good place, 
logistics is a good place--but it has taken them a long time to 
take the general domain of financial management and parse it 
across all the functions a financial manager does in the 
Federal Government. There are dozens of functions they do.
    Mrs. Hartzler. Do you presently have targets set that with 
these skill levels we want to have this done by October, we are 
going to have this skill set description done by November? Is 
there end-date goals that have been set on these things?
    Mr. Tamburrino. I would like to take that specifically as a 
research question. Some there are, some we have to develop 
them. So I would like to get back to you on that.
    [The information referred to can be found in the Appendix 
on page 83.]
    Mrs. Hartzler. Yes. Because I think that is important in 
goal setting to get things done, rather than just say we need 
to do a better job, or we--down the road we need to do it 
faster.
    Yes, Ms. Farrell.
    Ms. Farrell. In our February 2009 report for Mr. 
Tamburrino, and it is one that I was referring to, and we would 
be happy to discuss these issues, we did make a recommendation 
that DOD develop a performance plan to help them move forward 
in the development to meet all of the legislative requirements. 
And we agree, if there is a--if it is going to take years to do 
all 22 mission-critical occupations, then what is the plan?
    And it is quite involved, as Mr. Tamburrino said. It is 
identifying the skills, that is the first step, but then 
identifying, well, do you have needs today that are beyond what 
you have on board, besides what you need in the future? And it 
is from that that you develop your gap analysis.
    And, again, we keep coming back, the gap analysis is 
critical to have a road map to determine how to recruit, how to 
develop your people, how to train them. And those strategies 
must be flexible so they can adjust with emerging needs.
    Mrs. Hartzler. I would just say, my final comment, this 
needs to be done quickly, or else by the time you get done the 
skills will have changed that you need, and then you are just 
doing a perpetual loop.
    So thank you.
    The Chairman. Thank you.
    Mrs. Davis.
    Mrs. Davis. Thank you, Mr. Chairman.
    And I am sorry that I missed your testimony earlier. And I 
am trying to understand better what the appropriate mix of 
military, civilian and contractors are, and whether you could 
take that into an example, perhaps?
    I am sure this varies greatly by what people are doing, but 
I am also wondering if there are some general ways of looking 
at that, and whether there is some assessment, sort of 
understanding and analyzing how that worked--you know, whether 
the skill sets that people bring are different, whether 
accountability measures are different for someone who is a 
civilian employee versus a military, oversight functions and as 
well as contracting?
    Obviously a contractor can be fired, I would assume. I 
don't know what their contract might say.
    But how does that work together? And what issues do you see 
around that? Does--and what do we learn if we really try and 
study that? Has it been, and under what circumstances?
    Mr. Hutton. First, I would like to say that GAO has done a 
lot of work in this area, but I have to preface my comments by 
saying it is hard to come up with a magical ratio of 
appropriate mix.
    We have done a lot of work looking at the use of, say, 
contractors as contract specialists, just to use an example. If 
you are in a--and that is considered a closely supporting an 
inherently governmental function.
    From the work we have done, it is important that when an 
agency decides they want to use, say, a contractor for that 
type of activity, they have got to stand back and say, ``Okay, 
what is it exactly we want that contracting--contractor to do? 
Are we going to ask him to write statements of work?''
    If you are going to write statements of work, what 
implications does that have downstream in terms of 
organizational conflicts if they are from a firm that wants to 
bid on that contract? Just to illustrate the point.
    If it is something that might be more plain vanilla of a 
contracting support, like supporting some administrative 
function or something like that, you still might want to ask 
yourself--and you should ask yourself--``Okay, if I ask the 
contractor to do that, they are going to be providing an input 
to some Government official eventually that is going to have 
make a decision. Will that Government official know that that 
came from a contractor?''
    If not, that presents risk.
    Will that Government official be properly trained to 
understand the implications of what they are asking the 
contractor to do? If not, that is going to present risk to the 
Government.
    And in those situations, when you are getting into risky 
and riskier situation, you are putting the Government at risk 
of losing Government control and accountability over its 
decisionmaking.
    So there is no magical ratio, but I think that you have to 
look at each individual decision.
    But to start, though, I think you still need some kind of 
strategic vision as to what you do or you may not want 
contractors to do for policy reasons.
    Mrs. Davis. Are there decisions made as well that I think 
would indicate over time that that is a function that should be 
brought, essentially, in-house? I mean, if we don't have 
those--those skill sets.
    I am thinking, even about, you know, medical needs within 
the military going out to the civilian workforce and then 
eventually having to contract, because those skills aren't 
there. Clearly, in the world that we live in today, we don't 
have all the people that we could have in any of the services.
    But I am just trying to get a handle, I think, on that 
decisionmaking process and at what point those questions are 
asked, whether, in fact, truly, those skills are not in-house? 
And, again, what--what the accountability is and how that 
differs in the way jobs are delivered themselves?
    Mr. Hutton. Well, I will try to be brief. But I don't want 
to steal the thunder of DOD. Perhaps they have a view.
    But I still think you need a strategic vision and view of 
how you want to use--and in this case, we are talking about 
contractors.
    Congress has been pushing and urging the agencies to 
provide these inventories of service contracts. That is the 
first step. That is just getting a basic understanding of how 
we are using contractors, to what extent we are using 
contractors, and then looking at them on an individual basis 
and saying, ``What do we ask them to do? And are we okay with 
that or not?''
    Is it an enduring need, is it episodic, is it expertise? I 
mean, all these different factors come into play.
    But I think the inventory process ultimately is a tool that 
may help the agencies, and particularly DOD, get a better 
handle on that workforce mix that you are talking about.
    Mr. Tamburrino. Madam Congresswoman, thanks for that 
question.
    The mix between the military, civilian and contractor, as 
you said, is almost local. What is the mission on the ground 
for that local commander, and who does he need to perform that 
mission in terms of skill sets?
    I think if you are at the waterfront or on the ground 
deployed, it is principally military. And we understand that.
    If you are at a systems command or a buying command, I 
submit you are going to find mostly career civil servants, 
because that is an enduring proposition that needs a deep skill 
set in systems engineering, contract management, logistics 
management, financial management.
    The decision to award a service contract is generally 
predicated on we are not going to need that skill set for an 
enduring period, so let us just buy the packet of work we need 
that--for that given moment in time. Or, we just don't have 
that skill in the Government and we don't need that skill in 
the Government on an enduring basis. And that is how I think 
most local commanders go about making that decision.
    And I agree with the GAO. We take seriously this annual 
service contract inventory. And Dr. Stanley is putting a lot of 
emphasis on the amount of analysis that is going into that 
every year, so we can make an informed decision of what needs 
to stay inside the Government, because it is inherently 
governmental, or closely aligned that way, or more cost-
effective that way, and what can we take into the private 
sector, because that just represents a proposition we are able 
to deal with at that point in time.
    The Chairman. Mr. Wittman.
    Mr. Wittman. Thank you, Mr. Chairman.
    I would like to thank the witnesses for joining us today. I 
appreciate your efforts and your enlightenment into what I 
think is probably one of the more challenging aspects of what 
all of us are going to have to deal with going in the future, 
especially in days of what I call resource challenges.
    So let me ask this. I am going to pick up from where Mrs. 
Davis left off, and that is the whole idea of the proper mix, 
in which you look in the military, if you look at uniformed 
services, civilian and contractors, there has been a lot of 
back and forth, from insourcing to outsourcing and trying to 
find that right balance.
    And just as many of you have spoken about, it is trying to 
find out which fundamental elements the Government truly needs 
somebody in a Government position, where do we have a need 
elsewhere? I want to make sure that there is the right balance 
there.
    The key, I think, going in the future is to have the 
adaptability and flexibility in workforce to meet changing 
needs. And let us face it, we are in a pretty dynamic world and 
a pretty dynamic area of resources. If we can't redirect pretty 
quickly to meet those needs, that is going to hurt us. And it 
also adds to cost. And I think it takes away from our ability 
to be really efficient.
    Can you give me some indication, as we go down the road--
and there has been a lot of back and forth, as you know, in the 
whole debate about insourcing versus outsourcing, a certain 
number of positions being converted to the Government side.
    Can you give me an indication about where you believe we 
need to be, and are we there with the construction of our 
Federal workforce as it relates to defense matters?
    And, if we are not, what do we need to do to make sure we 
have that right mix and that we can be flexible enough in 
making decisions in a fairly short timeframe to make sure we 
have that right mix of human capital?
    Mr. Tamburrino. Mr. Congressman, thanks for that question.
    I think the Department of Defense efficiency initiatives 
launched us down that pathway. I think we were directed to 
critically examine our mission, prioritize mission sets, and 
rid ourselves of functions we did not--we did not have a need 
to do anymore, because, as you said, we are headed into a 
resource-constrained environment.
    So it is a matter of each component looking at that mission 
set, deciding what is important, making that very critical 
decision of what they are not going to do anymore in a 
resource-constrained environment because it is duplicative, it 
doesn't add value, or it just doesn't fit with what we are 
being told to do as the Nation's Armed Forces.
    And after that, it is literally making sure that the 
Government has the core capabilities it needs to be an 
intelligent buyer of goods and services. And that is very 
enduring. And I think that is the point of the annual inventory 
of contract services.
    So I couldn't tell you where the balance point is, other 
than I can tell you it is a critical focus right now to try and 
figure that out and develop some kind of analytical tool that 
would help us predict that on an ongoing basis, which we--we 
don't, frankly, have right now.
    Mr. Wittman. Well, let me ask you this, on a scale of 1 to 
10, 10 being where you would like to be in a perfect world, 
where do you believe you are on that continuum of creating that 
right mix of workforce in human capital?
    Mr. Tamburrino. Sir, I think we have been working the 
strategic human capital plan for 3 years. Each year we have 
made progress. I think now we really do have a good sense of 
where we want to go.
    So I would say I am right in the middle. I have a good 
basis. I think we have done a great job with the acquisition 
workforce. I think we have done an exceptional job with our 
senior executives, the 1,300 or 1,400 of those in the 
Department. And those are good launching pads.
    And I think several of our communities--financial 
management, logistics and medical--are in very good standing.
    So I think we have a good line of sight of where we have to 
go right now.
    Mr. Wittman. Could you give just some indication, a 
timeframe, about when you think you would ultimately get to 
where you would like to be or where you need to be?
    Mr. Tamburrino. Sir, as I said in my oral statement, I have 
kind of benchmarked 2015 as the--as being done.
    It is a large workforce. It is 780,000 people, spanning 
greater than 600 unique job series. So it is--it has got a 
large number of moving parts.
    But I have a tremendous obligation to get this right, and I 
take that very seriously.
    Mr. Wittman. Very good.
    Anybody else on the panel like to add their thoughts on 
that?
    Ms. Farrell.
    Ms. Farrell. We agree with Mr. Tamburrino, but the very 
first thing, before you start talking about how you use these 
tools, such as insourcing and outsourcing, is to determine your 
needs.
    And we keep going back to the first step is to assess your 
existing needs, and assess what you need for the future as well 
as what my colleague has pointed out about the inventory with 
the contract services.
    But first develop this, assess what your needs are, then 
look at what tools you have and what should be inside DOD and 
what should be going outside.
    Mr. Wittman. Thank you, Mr. Chairman. I yield back.
    The Chairman. Thank you very much.
    Mrs. Hanabusa.
    Ms. Hanabusa. Thank you, Mr. Chairman.
    Let us continue along those lines, Ms. Farrell.
    On page 6 of your report, you make a reference to basically 
the DOD has to provide a metric for measuring progress toward 
DOD's goal of having a mission-ready workforce.
    I guess this reminds me of another hearing that we had when 
we were going over the 30-year shipbuilding plans of the Navy. 
And we happened to have three graduates before us of the Naval 
Academy, all graduated the same year, and it was 36 years ago. 
So I asked them, ``From where you sit today, would you have 
guessed 30 years ago what your needs were?'' And of course, 
they said, ``No.''
    I mean, you know, it is a dynamic process, and it is one 
that changes. I am not defending the DOD, but the thing is that 
if you are holding them to a criteria of a mission-ready 
workforce, how are you going to know--how are they to know what 
the mission is going to be like 5 years, 10 years from now?
    And I can tell you, I represent Hawaii. Who would have 
thought that we would have gone from a conventional type of 
military to Strykers, all within a period of 5 years? How are 
they to know?
    And what I also want you to answer to me is it seems like 
if this requirement is put upon them and they can't project it, 
you are almost seem to be proposing outsourcing, because then 
you don't have to have a military-ready or a civilian workforce 
that can address things if you don't know what the mission is 
going to look like. I think we have seen in the past 10 years 
how different this mission is--if you can comment to that?
    Ms. Farrell. Sure. I think it is DOD that has made the 
statement many times that you have a plan to make a plan. And 
we emphasize that the strategies contained in their workforce 
plan when they develop them to meet their needs, needs to be 
flexible in order to address emerging needs.
    It is actually the legislative requirement that mandates 
that DOD look forward 7 years, starting with the year after 
they submit their workforce plan to Congress. It used to be 10 
years. And there is a lot of debate about how far forward can 
an organization be without losing some sense of reality and 
just along the lines of what you are saying.
    But there are emerging needs. Again, I will use my example 
that I had earlier of traumatic brain injury that developed and 
kept growing. And that was an emerging need several years ago, 
and it was the kind of need that needed to be built into the 
medical plan in order for the people to have the right medical 
provider.
    So it is--there are emerging needs that when, like Mr. 
Tamburrino talks about surveying for the existing. It is also a 
lot of knowledge about here is what is starting to break 
through. There is going to be issues for DOD in the future.
    Ms. Hanabusa. I understand that, Ms. Farrell. And I 
understand that Congress in its wisdom thinks we are doing the 
right things a lot of times. So that is why we have you doing 
reports to tell us, you know, ``You are off the mark.'' If you 
think that, you know, we are asking the DOD to do something 
that it can't do, you know, you should point it out.
    But it still begs the issue, which is that to define a 
mission-ready--I can understand a trauma situation like that, 
but let us talk about mission-ready. Basically what type of 
workforce are we going to need, for example, for the shipyards, 
for anything else into the future, when we are changing what 
they need to have the skills for?
    So civilian, for example. We may need welders today, but 
who knows whether that technology is going to change in 5 
years. And what do we do? Should there be a component of 
retraining? Should there be an assessment? What is it that when 
you say ``mission-ready workforce'' that you expect the DOD to 
be able to do when you made that statement?
    Ms. Farrell. I think that was their metric that they were 
using, saying that they would have the----
    Ms. Hanabusa. But you're judging----
    Ms. Farrell. But again, we believe in metrics. Whether it 
is congressionally mandated or not, we would believe that they 
need to have metrics for what they are trying to achieve. And 
we would believe that they need to look forward about their 
future workforce and what those needs are.
    Ms. Hanabusa. And that is my question. How do you 
determine, or how, in your mind, have they looked to the future 
workforce when we may not know what that future workforce is 
going to be like? You are almost like telling them--like the 
30-year plan. It is like, okay, just put something out there 
and say if they did that, would they satisfy the, ``metric'' by 
saying ``this is what we think it is going to be like and this 
is what we are doing''?
    Ms. Farrell. Well, again, we would want an assessment.
    Ms. Hanabusa. Thank you, Mr. Chair.
    The Chairman. Thank you.
    Mr. Reyes.
    Mr. Reyes. Thank you, Mr. Chairman.
    And thank you all for being here. And I apologize for not 
being here earlier, but we have these conflicting schedules 
here.
    Having had the experience of serving in the Border Patrol 
and being a chief in the Border Patrol back in the 1980s when 
the A-76 program first came out, and wanting to test the 
concept of contracting out services because it was going to 
save money. And having gone through that, which conclusively 
proved that it did not save money.
    We were a law enforcement agency, so we had a requirement 
of 24 hours, weekends, holidays; it didn't matter. We found out 
very quickly that we were limited in terms of after hours, 
because it would affect the budget that had been set up for the 
A-76 contract.
    We were limited in terms of vehicles, patrol vehicles that 
broke down unexpectedly, and we would have to wait until the 
contract hours kicked in, which were normally between 8 and 5 
during the day, which meant we had to make a decision whether 
or not we left the vehicle in isolated areas where it could be 
vandalized or compromised or some other way.
    So there are many, many issues like that, that came up in 
that process that we quickly determined, hey, A-76 may work 
someplace else, but it sure doesn't work in the law enforcement 
area.
    Having had that experience and then having gone through the 
experience of largely contracting out huge portions of the 
effort in Iraq and to a lesser degree in Afghanistan, I think, 
at least my opinion, what I have learned throughout--through 
this process--is that contracting out isn't all it is cracked 
out to be.
    And then I tried to mitigate that with my experience when I 
was in the Army, having had to pull K.P. [kitchen patrol]. It 
would have been nice to have contracted out the kitchen duties 
and all of those kinds of things.
    So in today's world, with the kinds of challenges that I 
think members have articulated here, and the kinds of things 
that we are trying to do to try to maximize efficiency and hold 
down costs, it really is a guessing game, because we don't know 
what requirements of the workforce are going to be in 3 years, 
5 years, or 10 years.
    So studies done about the things that have worked and the 
things that haven't worked where there has got to be a balance 
or a mixture of Federal employees to contract employees is very 
important.
    Mr. Chairman, I know you and I have discussed it, that we 
don't want to just jump off and do, without making sure we know 
exactly, or at least we think we know what the results are 
going to be. But it is always important to look at history to 
be able to make those informed decisions.
    Being a 26\1/2\-year Federal employee, obviously I have 
great respect for the institutional knowledge, the dedication, 
the professionalism that Federal employees bring to the 
process. Nothing against contract employees, but they have--
Federal employees have a vested interest in the career, where 
they are counting on--where they are counted on--to carry out 
the mission, wherever that mission takes them.
    In today's world, the other thing we have to consider is 
that we are facing asymmetric threats that make it necessary 
for DOD and intelligence to work closer and closer together, 
which makes it imperative, I think, that we put in the mix the 
kinds of duties that would be risk jobs--high-risk jobs--that 
can't be done readily by contractors.
    So I hope all of these things we can take into account. I 
definitely want to thank you for the work that you do in this 
area, but I think we are a long ways from finding that right 
balance or that right combination. I think there is much more 
work to be done, so I hope we are able to continue in a much 
slower pace so that like that old rule of the carpenter, 
``measure twice and cut once,'' because it is expensive if you 
don't. We learned that in the Iraq war.
    Thank you, Mr. Chairman.
    And thank you all again.
    The Chairman. I am still trying to find out why you wanted 
to contract out K.P.?
    [Laughter.]
    Mr. Reyes. Oh, because I hated getting up at 3 o'clock.
    The Chairman. Start peeling those potatoes.
    Well, we didn't run into the problem I was concerned about. 
The members all had an opportunity to ask their questions and 
still make their votes.
    So thank you very much for being here.
    And with that, the committee will stand adjourned.
    [Whereupon, at 2:23 p.m., the committee was adjourned.]
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                            A P P E N D I X

                             July 14, 2011

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              PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                             July 14, 2011

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              Statement of Hon. Howard P. ``Buck'' McKeon

              Chairman, House Committee on Armed Services

                               Hearing on

           Human Capital Management: A High-Risk Area for the

                         Department of Defense

                             July 14, 2011

    Good afternoon, ladies and gentlemen. Thank you for joining 
us today as we look at the Department of Defense's human 
capital planning efforts. Unfortunately, because most of the 
Federal Government, particularly DOD, has done such a woeful 
job in this area, it landed on GAO's high-risk list in 2001. 
After 10 years, it is still listed as high risk.
    Improvement in DOD's management of its strategic human 
capital resources is an absolute must. As the Defense Business 
Board pointed out, we have active duty military serving in 
positions that might otherwise be suitable for civilians. This 
could result in a serious misapplication of the special 
training and skills of our Armed Forces. In contrast, too often 
we have seen contractors serving in positions that should be 
staffed by civilians or military. The potential for waste and 
mismanagement is enormous when one considers the 718,000 DOD 
civilians and the several thousands of private sector 
contractors.
    Recognizing this, Congress mandated that DOD conduct a 
thorough analysis of its manpower requirements, and develop a 
strategic plan of action for shaping its civilian workforce to 
address shortfalls in critical skills and competencies that 
affect performance of DOD's operations and the readiness of its 
forces. The analysis isn't about insourcing versus outsourcing. 
These are just planning tools, like military to civilian 
conversions, to ensure the appropriate element of the 
workforce--be it military, civilian or contractor--is being 
used and that adequate oversight is in place.
    I believe this is simple common sense, so I find it 
disheartening that Congress actually had to step in and require 
this analysis because DOD paid little or no attention to 
something so logical, and so critical, as workforce management.
    This is particularly true in the area of acquisition 
management where a continuing shortage of trained acquisition 
personnel impedes DOD's capacity and capability to oversee its 
increasingly complex contracts. As GAO noted in its 2011 high-
risk report, ``The lack of well-defined requirements, the use 
of ill-suited business arrangements, and the lack of an 
adequate number of trained acquisition and contract oversight 
personnel contribute to unmet expectations and place the 
Department at risk of potentially paying more than necessary.''
    Over the past several years, Congress has provided the 
Department with various flexible authorities aimed at improving 
the Department's acquisition workforce.
    However, on a broader workforce level, we were informed 
last year that several significant manpower policies were on 
the verge of being signed out. But to date, we have seen 
nothing. Instead, arbitrary decisions are being made without 
sufficient analysis being conducted or guiding principles in 
place. As a result, the committee has included several 
provisions in this year's authorization bill to force a more 
effective human capital planning and total force management 
approach.
    An improved manpower requirements determination process 
should ensure that DOD has the right people, with the right 
skills, doing the right jobs, in the right places, at the right 
time. Again, that is just simple common sense.

                      Statement of Hon. Adam Smith

           Ranking Member, House Committee on Armed Services

                               Hearing on

           Human Capital Management: A High-Risk Area for the

                         Department of Defense

                             July 14, 2011

    Thank you to all our witnesses for appearing here today to 
discuss strategic planning for the Department of Defense's most 
valuable resource: its military and civilian workforce.
    While I recognize that the focus of today's hearing is 
management of DOD's civilian workforce, I intentionally 
included our military members in my first statement because 
what we would like to see is a strategic workforce management 
plan that covers the Department's total force--its military, 
civilian Federal employees, and contractor personnel.
    Simply put, as GAO has stated, the Department needs to have 
``the right people, with the right skills, doing the right 
jobs, in the right places, at the right time.''
    I understand that the Department of Defense is dealing with 
extreme budgetary challenges. Arbitrary hiring freezes or 
manpower reductions in the absence of a requirement-based 
strategic plan for managing the workforce are 
counterproductive. Requirement-based manpower planning should 
allow the Department to reshape the workforce and achieve 
necessary savings without negatively affecting mission 
attainment.
    As you note in your testimony, Mr. Tamburrino, the global 
security demands placed on the Department will not abate just 
because resources are constrained. The Department must 
structure a total force that allows you to successfully execute 
the full range of missions in the National Defense Strategy at 
prudent levels of risk, and achieve the best possible return on 
investment.
    One area where the Department can better leverage that 
return on investment and, as Mr. Charles noted, increase its 
buying power and deliver on efficiency and affordability is 
through the regeneration of its acquisition workforce. The 
Congress bears responsibility in this regard, because we 
mandated the downsizing of the Department's ``shoppers'' in the 
1990s. The void of expertise this downsizing created has 
resulted in situations such as one we learned of this week, 
where the DOD Inspector General assessed the Air Force spent 
$94.3 million on eight contracts ``that constituted work so 
closely supporting inherently governmental functions as to 
create significant risk that the contractors could influence or 
direct decisions that are not in the best interest of the Air 
Force.'' This work included developing and recommending policy 
changes, governing, strategic planning for the Air Force, 
creating and submitting budget requests, and evaluating other 
contractors' cost proposals.
    The Department must maintain a core acquisition capability 
and continuously improve acquisition outcomes to ensure our 
warfighters always have the decisive edge. So I am pleased to 
see that the Department has reversed the decline and is filling 
positions, adding some 8,600 personnel to date of the 20,000 
positions announced.
    At the same time, the Department must apply the same rigor 
in analyzing, costing, and validating its requirement for 
contractor support. A memorandum issued June 11 by former 
Defense Secretary Gates confirms an inconsistency in the 
Department's approach to filling workforce requirements. The 
memo directing targeted levels for combatant command manpower 
billets for the next three years requires that any growth in 
civilian and military manpower be requested through the Joint 
Manpower Validation Process. I would agree with our friends 
from the Federal employee unions that it is indefensible for 
DOD to require formal justification of civilian manpower 
requests at the same time it is not reviewing commercial 
functions--or even inherently governmental functions--for 
insourcing and when the FY12 budget request significantly 
increases spending on service contracts. 

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              WITNESS RESPONSES TO QUESTIONS ASKED DURING

                              THE HEARING

                             July 14, 2011

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            RESPONSE TO QUESTION SUBMITTED BY MRS. HARTZLER

    Mr. Tamburrino. Yes, the Department has developed competency models 
which include the tasks, skills, knowledge, and abilities required in 
an occupation and grade level. The Department is now working on a plan 
to expand functional communities and develop competency models to cover 
all the major occupations in the DOD workforce by FY 2015. In addition, 
efforts are underway to develop and implement tools for DOD-wide 
competency assessment and workforce forecasting and analysis. These 
tools are needed to facilitate more comprehensive workforce planning 
across the Department. The goal is to complete these projects and 
achieve a Department-wide competency gap assessment and strategic 
workforce plan for closing critical competency gaps by FY 2015. [See 
page 18.]
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              QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                             July 14, 2011

=======================================================================

      
                   QUESTIONS SUBMITTED BY MR. MCKEON

    Mr. McKeon. In briefings the committee staff had with DOD Personnel 
and Readiness last year, the staff was informed that P&R was on the 
verge of issuing several new policies related to total force management 
and manpower management as well as on the contractor inventory (to 
leverage the Army inventory model). To date, we have seen nothing. How 
can P&R and the Department properly fulfill their total force 
management responsibilities in the absence of these policies? These 
policies supposedly were ``imminent'' so what has been the delay--
almost a year in some cases? When will these policies finally be 
implemented?
    Mr. Tamburrino. In light of shifting mission requirements and 
current fiscal constraints, our goal is to ensure that policies meet 
not only the letter but the intent of the law, and also support the 
operational needs of our commanders and the management requirements of 
decision makers. To that end, memoranda directing and/or facilitating 
the implementation of recent statutory changes have been signed out to 
various organizations across the Department in the past six months. 
Currently, these policy memorandum and guidance documents are in 
various stages of coordination across the Department. As those policies 
are issued, they are disseminated across the Department and will be 
made available to the Congress when complete.
    Mr. McKeon. The DOD IG has released reports noting that the Army 
and Air Force have inappropriately outsourced inherently governmental 
functions. This is very disturbing since it puts the Government at 
tremendous risk of waste, fraud and abuse. What is the Department doing 
to rein in misuse of contractors in these instances?
    Mr. Tamburrino. In order to minimize the potential risks, the 
Department is committed to meeting its statutory obligations under 
Title 10 (sections 2330a, 2383, and 2463) to annually inventory and 
review its contracted services, identifying those that are 
inappropriately being performed by the private sector and should be 
insourced to Government performance. This review includes not only 
those services that are identified to be inherently governmental in 
nature but also those that are determined to be so closely associated 
with inherently governmental functions as to reasonably warrant 
Government performance. Some of these services may be determined to be 
no longer required or of low priority, and as a consequence may be 
eliminated or reduced in scope, while others may be identified for 
insourcing. Others may appropriately continue to be contracted for but 
require additional Government oversight and control to minimize the 
risk of fraud, waste, and abuse. Those contracted services that meet 
the necessary criteria (consistent with governing statutes, policies, 
and regulations) will be insourced to Government performance.
    Mr. McKeon. Are there going to be civilian reductions-in-force 
(RIF) because of the billet freeze? In a RIF, people already near 
retirement stay and the younger employees go. As such, the skills you 
may need are not necessarily the skills you retain. Given the magnitude 
of reductions you may need to make to meet the billet freeze, how will 
that affect the long-term viability of your mission, and retention of 
the right civilian and contract skills mix?
    Mr. Tamburrino. Until all reviews are completed and organizational 
efficiencies fully implemented, projecting potential RIF actions in the 
future would be premature. The Department is committed to its civilian 
workforce and uses all possible personnel tool/processes available to 
avoid the potential for involuntary separations. The current guidance 
is to maintain FY10 civilian funding levels, with some exceptions, for 
the next three years. This direction was implemented in conjunction 
with organizational assessments and mission/function prioritization. 
DOD organizations, military departments and defense agencies continue 
to review their workload and staffing (military, civilian, and 
contracted services), identifying low priority or marginal value 
functions for elimination. As part of these reviews, resources/
personnel may be realigned/reassigned to minimize potential adverse 
personnel actions, such as reductions-in-force (RIF), with some RIF 
notices . In instances when and where appropriate, organizations have 
requested and have been granted relief from FY10 funding levels to meet 
critical workload requirements and ensure appropriate workforce mix and 
skill allocation.
    Mr. McKeon. Historically, civilian personnel freezes have led to 
increased contracting out. The work still needs to be done and if 
civilian employees cannot be used, then contracts will be awarded 
instead. What mechanisms are being put into place to ensure that 
contractors will not be substituted for civilians?
    Mr. Tamburrino. The Department remains committed to meeting its 
statutory obligations under 10 USC 2463, which requires special 
consideration for using DOD civilian personnel for new or expanding 
work. This consideration regarding DOD civilian personnel is consistent 
with applicable policies such as those regarding cost, ``Estimating and 
Comparing the Full Costs of Civilian and Military Manpower and Contract 
Support'' (as updated in October 2010), and the Department's workforce 
mix criteria, to include risk assessment and mitigation, in DOD 
Instruction 1100.22, updated April 2010.
    While current direction to DOD Components is to hold (through FY 
2013) to FY2010 funding levels for civilian personnel (with some 
exceptions), DOD components are also being asked to reduce/eliminate 
lower priority activities and streamline those that remain. New/
expanding work requiring civilian performance may be performed by 
existing personnel by refining existing duties or requirements; 
establishing new positions by eliminating/shifting equivalent existing 
manpower resources (personnel) from lower priority activities; or 
requesting an exception to the civilian funding levels.
    Mr. McKeon. Please discuss the contradiction between the 
Department's 2009 human capital strategic plan which stated that 
civilian senior leader requirements would increase by 400 positions by 
2015 and the Secretary of Defense's expectation that the Department 
would eliminate at least 150 senior leader positions over the next two 
years.
    Mr. Tamburrino. In the 2009 report, 240 immediate needs were 
identified and 400 additional Senior Executive Service (SES), Senior 
Level (SL), and Scientific and Technical (ST) requirements were 
projected by 2015 based on mission requirements. At that time, the 
Department was growing considerably with emerging requirements. 
However, in FY 2010, the Department conducted a comprehensive review of 
its Civilian Service Executive cadre in order to eliminate positions 
that were not aligned with DOD's current mission set. After concluding 
this review, the Department then identified 209 Civilian Senior 
Executives (to include Defense Intelligence Senior Executive Service 
(DISES) and Defense Intelligence Senior Level (DISL) positions) to be 
eliminated, combined or downgraded.
    Mr. McKeon. Secretary Gates told The Washington Post that Federal 
employees were 25% less costly than contractors. He also stated that 
insourcing hadn't realized the savings he had hoped for. The Department 
has reported to the Congress that in the past year significant 
efficiencies have been realized through insourcing. Can you please 
reconcile these statements?
    Mr. Tamburrino. Yes. As a result of insourcing, in the fiscal year 
2010 budget, the Department made reductions to specific categories of 
contracted services dollars. In the budget for fiscal year 2010, the 
reduction associated with insourcing contracted services was $900 
million. However, elsewhere and outside of insourcing, the funding 
allocated to contract services varied. The growth in all contracted 
services for FY2010 was more than $5 billion, resulting in a net $4.1 
billion of growth in contracts. This was the context for Secretary 
Gates' remarks. DOD components have found that they can generate 
savings or efficiencies through insourcing certain types of services or 
functions. These savings are generally not visible at a macro DOD-wide 
level and materialize in the form of resource realignment at the 
individual Component or command level to other priorities or 
requirements.
                                 ______
                                 
                   QUESTION SUBMITTED BY MS. BORDALLO

    Ms. Bordallo. In the current constrained fiscal environment, do 
civilian personnel limitations imposed by the efficiency initiative 
essentially limit insourcing, even where civilian performance is 
demonstrably more cost efficient than continued contract performance or 
where the work is inherently governmental or closely associated with 
inherently governmental?
    Mr. Tamburrino. While current direction is to hold to FY10 civilian 
funding levels (with some exceptions) through FY13, this does not 
preclude the Department from rebalancing the workforce and aligning 
work to the Government workforce that is more appropriately performed 
by civilian employees.
    The Department remains committed to meeting its statutory 
obligations under Title 10 (sections 2330a, 2383, and 2463) to annually 
inventory and review its contracted services, identifying those that 
are inappropriately being performed by the private sector and should be 
insourced to Government performance. This includes services that are:

      inherently governmental or closely associated with 
inherently governmental in nature;

      may otherwise be exempted from private sector performance 
(to mitigate risk, ensure continuity of operations, build internal 
capability, meet and maintain readiness requirements, etc);

      require special consideration for Government performance 
under the provisions of 10 USC 2463; or

      can be more cost effectively delivered by the Government, 
consistent with the Department's statutory obligations under 10 USC 
129a and based on a cost analysis.

    Those contracted services that meet the necessary criteria 
(consistent with governing statutes, policies, and regulations) will be 
insourced, by:

      absorbing work into existing Government positions by 
refining duties or requirements;

      establishing new positions to perform contracted services 
by eliminating or shifting equivalent existing manpower resources 
(personnel) from lower priority activities; or on a case-by-case basis, 
requesting an exception to the current civilian funding levels.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. FORBES

    Mr. Forbes. How can the Department of Defense adequately ensure 
synchronization between separate and discrete military, civilian 
employee, and contractor decisions and ensure that alleged savings from 
reducing one category of manpower are not offset by increases in other 
categories of manpower, in the absence of P&R policy and any active 
role in the efficiencies process? While we applaud the objective of 
finding efficiencies, we fear the effort could fail precisely because 
of this absence of a total force management perspective and P&R 
activity, a vacuum that seems to be filled by uncoordinated 
Comptroller, CAPE, and efficiencies task force actions.
    Mr. Tamburrino. Across the entire Department, improvements to the 
Total Force management of our active/reserve military, Government 
civilians, and contracts for services is critical if we are to control 
personnel costs as a share of the budget. We are changing how we 
strategically look at the Total Force, both as we execute our mission 
and plan across the FYDP. We must start at the beginning by carefully 
assessing ``demands'' for manpower, rigorously determining which should 
be funded and then how (active/reserve military, civilians, or 
contracts). To that end, memoranda directing and/or facilitating the 
implementation of recent statutory changes have been signed out to 
various organizations across the Department in the past six months.
    Total Force Management requires a holistic analysis and 
prioritization of the work to be done, and the identification and 
investment in the most effective and efficient component of the 
workforce to best accomplish the tasks to deliver the capabilities and 
readiness we need. The cost of military, Government civilians, and/or 
contractors depends greatly on individual facts and circumstances. 
Given that, we must do more to objectively analyze not only the demands 
for manpower but, if appropriate to resource, what the best ``Total 
Force solution or mix'' might be. Additionally, the separate decisions 
that affect each component of the Total Force must be better 
synchronized to achieve the desired outcomes and balance operational, 
fiscal, and acquisition risks.
    Our work must not only include the development and promulgation of 
policies, but we must also ensure the Department provides managers with 
the tools, resources, training, and information necessary to achieve 
the outcomes we desire in this increasingly austere fiscal environment. 
Lastly, our current business processes must be better synchronized if 
we are to achieve a more appropriate balance in our workforce, aligning 
inherently governmental activities to military and civilian workforces 
and commercial activities to the most cost effective service provider--
be that military, civilian, or contracted support.
    Mr. Forbes. What steps is the Department taking to improve the 
visibility of contracted services and ensure that such services gets 
the same oversight that are currently afforded to the military and 
civilian workforce?
    Mr. Tamburrino. The Department is refining how we inventory 
contracted services, to collect the actual direct labor hours and costs 
related to a specific task, as opposed to estimating contractor full 
time equivalents based on the dollars obligated for an entire contract 
(which also includes overhead and profit for the private sector) in 
accordance with Congressional direction and Title 10 requirements. In 
the past year, the Department has supported increased visibility into 
contracted services by improving the utility of the Inventory of 
Contract Services (ICS) and establishing related management mechanisms. 
This includes: expanding the ICS' level of detail, adopting a uniform 
taxonomy across DOD that organizes Product Service Code (PSC) 
functional groups into mission categories, and installing senior 
service managers to manage contracted services by portfolio.
    In general, we purchase services, as opposed to specific numbers of 
employees, from private sector firms. It is not appropriate or accurate 
for DOD to ``count'' contractor employees for the purposes of oversight 
or workload accounting. However, it is critical that we understand with 
greater clarity all of the services DOD contracts for, and measure and 
assess that work against a standard measure of work (``full time 
equivalents'') for our full-time Government personnel.
    Mr. Forbes. What do you view as the current weaknesses in the DOD 
workforce? And, in your view what are the causes for those weaknesses? 
Conversely, what are the strengths?
    Mr. Tamburrino. We are currently finalizing the 2010-2018 Strategic 
Workforce Plan for Congress that will identify workforce challenges and 
strategies to address workforce gaps based on requirements in mission 
critical occupations. A significant weakness of the current workforce 
plan is that competency identification and gap analysis have been 
limited. While competencies have been developed, or are in the process 
of being developed for most mission critical occupations, the 
Department lacks an enterprise tool to assess, track, and manage 
competencies across the workforce of nearly 800,000 employees. However, 
the current workforce plan does forecast workforce needs and gaps in 
mission critical occupations, identifies strategies to address 
environmental challenges, and includes results-oriented performance 
measures to track planning progress. The goal is to fully implement 
competency management tools across the Department for all major 
occupations and develop a workforce plan that fully meets the statutory 
planning requirements by FY 2015.
    As far as the strengths, the Department is building upon the 
improvements in managing the utilization of our senior leaders. We have 
designed and implemented executive development programs and a talent 
management process that is starting to develop and hone in on the core 
competencies we have identified as critical for our Senior Executive 
Service (SES), Senior Level (SL), and Scientific and Technical (ST) 
workforce. One area of additional focus is on our ability to succession 
plan to at the Enterprise level. We currently possess the ability to 
succession plan at the Component level, but recognize that in order to 
be able to know our talent capabilities as a Department, we must 
augment our process and tools to move to a level where we can 
effectively move talent across the Department. At the Component level, 
the services have established a robust talent management system and 
succession planning to accomplish this. However, we have not reached 
the ability at the present time to perform this at the Enterprise 
level. We are working towards that goal and are making significant 
efforts.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. TURNER

    Mr. Turner. Could you please explain the apparent contradiction 
between the Department's 2009 human capital strategic plan which stated 
that civilian senior leader requirements would increase by 400 
positions by 2015 and the Secretary of Defense's expectation that the 
Department will eliminate at least 150 senior leader positions over the 
next two years?
    Mr. Tamburrino. In the 2009 report, 240 immediate needs were 
identified and 400 additional Senior Executive Service (SES), Senior 
Level (SL), and Scientific and Technical (ST) requirements were 
projected by 2015 based on mission requirements. At that time, the 
Department was growing considerably with emerging requirements. In FY 
2010, the Department conducted a comprehensive review of its Civilian 
Service Executive cadre, seeking to eliminate positions that were not 
aligned with DOD's current mission set. Concluding this review, the 
Department identified 209 Civilian Senior Executives (to include 
Defense Intelligence Senior Executive Service (DISES) and Defense 
Intelligence Senior Level (DISL) positions) to be eliminated, combined 
or downgraded.
    Mr. Turner. What is the status of the Department's assessment of 
its senior leader positions, in response to the Secretary's memo? What 
were the results of the assessment and were they documented as GAO had 
recommended?
    Mr. Tamburrino. In response to GAO's recommendation to document our 
biennial process, we have included this process in Department of 
Defense Instruction (DoDI) 1400.25, Volume 923, ``DoD Civilian 
Personnel Management System: Career Life Cycle Management of Executive 
Talent and Sourcing,'' which is currently entering the Department's 
formal coordination process. The Secretary's Efficiency Initiative 
resulted in 209 Civilian Senior Executive (CSE) positions for 
elimination or downgrade. This CSE population included Senior Executive 
Service (SES), Senior Level (SL), Senior Technical (ST), Defense 
Intelligence Senior Executive Service (DISES), Defense Intelligence 
Senior Level (DISL), and Highly Qualified Experts (HQE). Currently, the 
Department has eliminated 102 CSE positions.
    Mr. Turner. Are there going to be civilian reductions-in-force 
(RIF) because of the billet freeze? Given the magnitude of reductions 
you may need to make to meet the billet freeze, how will it affect the 
long-term viability of your mission, and retention of the right 
civilian and contractor skills mix?
    Mr. Tamburrino. Until all reviews are completed and organizational 
efficiencies fully implemented, projecting potential RIF actions in the 
future would be premature. The Department is committed to its civilian 
workforce and uses all possible personnel tool/processes available to 
avoid the potential for involuntary separations. Current guidance is to 
maintain FY10 civilian funding levels, with some exceptions, for the 
next three years. This direction was implemented in conjunction with 
organizational assessments and mission/function prioritization. DOD 
organizations, military departments and defense agencies continue to 
review their workload and staffing (military, civilian, and contracted 
services), identifying low priority or marginal value functions for 
elimination. As part of these reviews, resources/personnel may be 
realigned/reassigned to minimize potential adverse personnel actions, 
such as reductions-in-force (RIF). In instances when and where 
appropriate, organizations have requested and have been granted relief 
from FY10 funding levels to meet critical workload requirements and 
ensure appropriate workforce mix and skill allocation.

    Mr. Turner. In February 2011 GAO noted that acquisition management 
has a shortage of trained personnel to oversee increasingly complex 
contracts. With this in mind, could you please explain then why the Air 
Force did not exempt acquisition personnel in their May 2011 
Implementation of Civilian Hiring Controls?
    Mr. Charles. Current Air Force hiring controls exempt acquisition 
positions funded by the Defense Acquisition Workforce Development Fund.
    Mr. Turner. The April 2010 workforce strategy indicated that DOD 
intended to grow its acquisition workforce by nearly 20,000 individuals 
through fiscal year 2015, through a combination of about 10,000 new 
hires and an equal number from insourcing functions that were being 
performed by contractor personnel. Since the report was issued, the 
Secretary of Defense has announced his intent to limit DOD's budget 
growth and announced that insourcing decisions were to be made on a 
case-by-case basis. Could you explain the reasoning in these two 
differing positions? Does AT&L plan to publish a policy on human 
capital management?
    Mr. Charles. DOD has made significant progress towards increasing 
capacity of the in-house acquisition workforce and has continued growth 
supported by the Defense Acquisition Workforce Development Fund. DOD is 
assessing its progress and at this time it is appropriate that 
additional insourcing that would result in new civilian funding 
requirements be approved on a case-by-case basis. DOD is working 
closely with DOD components on continuation of efforts to strengthen 
the workforce and is preparing an updated human capital report which 
will be provided to Congress.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. PALAZZO

    Mr. Palazzo. As a small business owner and a CPA I am all too 
familiar with the challenges of running a business, and as a Marine and 
an Active National Guardsman, I have had an opportunity to work with 
the DOD's civilian workforce in many different capacities. Lack of 
leadership and lack of a consistent approach in reforming and 
modernizing the Federal Government's management practices is nothing 
new, and the lack of consistency and effective practices has created a 
serious problem within the DOD. I think this is one of the biggest 
challenges facing our committee. Because of mistakes made within DOD 
(or by previous policy makers), it is vital that the members of this 
committee identify the problems, correct the errors, and assist DOD in 
identifying the steps to avoid these problems (in the future). I for 
one want to ensure that the people of my district and the men and women 
serving our country in uniform are not negatively affected by these 
same issues. My district includes several military bases that I am very 
proud of and I am particularly proud of the men and women who are 
working there, and the thousands of soldiers and airmen that come 
through every year for training or deployments. One of the issues that 
I consistently hear about from the men and women working in support of 
the DOD facilities in Mississippi is insourcing within the Department 
of Defense.
    a) Do you believe that insourcing jobs to the Federal Government 
has had any effect on the problems that we are seeing today in the 
field of Human Capital Management, leadership and management practices 
in particular?
    b) I believe that the private sector's management practices, in 
many cases, are superior and more focused that those used within our 
DOD civilian workforce. What are your thoughts on the practices used by 
industry versus those used within DOD?
    c) Are there any partnerships to be gained here, by which the DOD 
can use proven business practices to get back on track?
    Mr. Tamburrino. a) No. Across the Department, insourcing has been a 
very effective tool to rebalance the workforce, realign inherently 
governmental and other critical work to Government performance (from 
contract support), and in many instances, to generate resource 
efficiencies for higher priority goals. Among other things, our 
insourcing efforts support operational readiness, mitigate risk, and 
ensure continuity of operations. These efforts help deliver the best 
support possible, with an appropriately structured workforce and in a 
fiscally efficient manner, to our Soldiers, Sailors, Airmen, and 
Marines, and their families.
    b) DOD is aggressively moving toward Strategic Human Capital 
Management business practices (also in use with the private sector) 
that enhance our ability to develop a high-performing workforce that 
meets the mission needs of DOD today and in the future. We are moving 
in the direction of developing a portfolio of analytical capabilities 
which will allow us to understand the demand signal for personnel 
resources, to include the proper workforce mix of active and reserve 
military, civilian, and contract requirements, and to identify the 
strengths and weaknesses in the skill portfolio of our workforce. DOD 
is tracking strategic workforce planning progress using results-
oriented performance measures, which are being further refined and 
institutionalized. We are also implementing a corporate governance 
structure to oversee the effective management Total Force planning and 
requirements.
    c) Though the Federal hiring process differs from private sector 
processes due to Merit System Principles established through Federal 
regulation, DOD has leveraged a number of private sector practices as 
part of its hiring reform implementation efforts. Since 2007, DOD has 
conducted Business Process Review efforts across the enterprise using 
Lean Six Sigma methodology to identify inefficiencies in its overall 
hiring process. In addition, the Department has reviewed studies 
conducted by the Corporate Leadership Council, the Corporate Executive 
Board, and the Partnership for Public Service, thereby adopting best 
practices in hiring metrics, strategic recruitment, and candidate 
assessment. Some of these best practices include streamlining job 
opportunity announcements, developing executive dashboards, developing 
targeted candidate assessments, and creating on boarding training for 
hiring managers. Finally, DOD has partnered with the Office of 
Personnel Management to develop competency models that identify the 
toolkit of skills that employees in a career field should possess as 
they progress from entry through senior-level positions.

                                  
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